TCO Comparison: Solar vs Grid Streetlighting

Summary

This article compares 20‑year total cost of ownership (TCO) for solar streetlights vs. grid-connected lighting. It quantifies CAPEX, OPEX, and maintenance, showing up to 40–60% lifecycle savings, 0 kWh grid use, and payback in 4–7 years for municipal and private developers.

Key Takeaways

• Quantify 20‑year TCO by modeling 4,000–4,500 annual operating hours, 0.10–0.18 USD/kWh tariffs, and 3–5% energy inflation to reveal 30–60% lifecycle savings with solar streetlights.
• Reduce CAPEX by up to 20–30% on greenfield sites by avoiding 0.5–1.5 km of trenching per km, plus cabling and transformer upgrades typical of grid-connected lighting.
• Cut OPEX by eliminating 100% of grid energy costs and reducing maintenance truck rolls from 1–2 per year (grid) to 1 every 3–5 years (solar), especially with LiFePO4 batteries.
• Improve reliability with ≥99% lighting availability using correctly sized PV (≥80–120 W) and batteries (≥60–120 Ah) versus grid outages that can exceed 50 hours/year in many regions.
• Accelerate deployment timelines by 30–50%, avoiding 3–9 month utility approvals and grid extensions; solar streetlights can be installed and commissioned in days per segment.
• Enhance ESG metrics by cutting 0.4–0.8 kg CO₂/kWh, delivering 5–20 t CO₂e avoided per km of roadway per year compared to grid-powered sodium or LED lighting.
• Optimize design by matching pole spacing (25–40 m), lumen output (3,000–8,000 lm), and autonomy (2–3 nights) to IES/EN standards while minimizing oversizing and stranded CAPEX.
• Improve financing and procurement outcomes with performance-based SLAs, 10–15 year warranties, and clear NPV/IRR models that target 8–15% project IRR for both municipal and private developers.

TCO Comparison: Solar Streetlights vs. Grid-Connected Lighting for Municipal and Private Developers

Municipalities and private developers are under pressure to expand lighting coverage, cut operating budgets, and meet decarbonization targets. Streetlighting can represent 30–60% of a city’s electricity bill, and unlit or poorly lit roads raise safety and liability risks. Historically, grid-connected sodium or LED systems were the default, but high grid tariffs, unstable grids, and falling solar/BESS costs have made solar streetlighting a serious alternative.

A rigorous total cost of ownership (TCO) comparison is essential. Focusing only on initial CAPEX hides the long-term cost of energy, maintenance, and grid infrastructure. This article breaks down 20‑year TCO for solar vs. grid-connected lighting, providing a structured framework for municipal and private-sector decision-makers.

Technical and Economic Deep Dive

1. Cost Components in a 20‑Year TCO Model

A robust TCO model should include:

• CAPEX – Luminaire & Pole

  • LED luminaire (30–80 W)
  • Pole (6–10 m), foundation, brackets
  • Control gear (drivers, controllers)

• CAPEX – Energy Supply

  • Solar streetlight: PV module (80–200 W), battery (LiFePO4 20–120 Ah), charge controller, wiring, mounting
  • Grid-connected: Cables, trenching/ducting, junction boxes, feeder pillars, transformers or upgrades

• OPEX – Energy

  • Grid electricity consumption (kWh/year) × tariff
  • Tariff escalation (typically 3–7%/year)

• OPEX – Maintenance

  • Lamp/driver replacement cycles
  • Battery replacement (solar)
  • Preventive inspections and cleaning
  • Corrective maintenance (truck rolls, fault repair)

• Other Costs

  • Permitting and utility interconnection
  • Outage-related costs (e.g., safety incidents, penalties, reputational risk)

2. Baseline Technical Assumptions

To compare on a like-for-like basis, consider a typical local road or industrial park application:

• Operating hours: 11–12 hours/night, ~4,000–4,500 h/year
• Lighting level: 3,000–8,000 lumens per pole (equivalent to 30–70 W LED)
• Pole spacing: 25–40 m, 25–40 poles/km
• Design life: 20 years
• Grid tariff: 0.10–0.18 USD/kWh (escalating 3–5%/year)
• Grid outage: 20–100 hours/year in many emerging markets

3. CAPEX: Where Solar Streetlights Win and Where They Don’t

3.1 Greenfield Sites – Solar Advantage

On new roads, industrial parks, campuses, or peri-urban developments with no nearby grid:

• Grid-connected CAPEX drivers:

  • Trenching: 0.5–1.5 km per km of road (both sides), often 50–150 USD/m
  • Cables: medium/low voltage cables at 20–60 USD/m
  • Transformers/feeder upgrades: 10,000–50,000 USD per substation
  • Civil works, reinstatement, traffic management

• Solar streetlight CAPEX drivers:

  • Integrated PV–battery–LED unit per pole
  • No trenching, no cabling, no transformer upgrades

Result: On greenfield sites, solar streetlights can reduce initial project CAPEX by 20–30% per km compared to grid-connected lighting, even though the per-pole hardware cost is higher.

3.2 Brownfield, Dense Urban Areas – Mixed Picture

Where grid infrastructure already exists along the corridor:

• Grid-connected lighting may have lower incremental CAPEX if spare capacity and ducts are available.
• Solar streetlights still avoid new trenching, but the CAPEX gap narrows.

In these cases, the decision often hinges on OPEX and reliability rather than CAPEX alone.

4. OPEX: Energy and Maintenance Cost Drivers

4.1 Energy Costs

For a 50 W LED luminaire operating 4,200 h/year:

• Annual energy use: ~210 kWh/pole/year
• At 0.14 USD/kWh: ~29 USD/pole/year in year 1
• Over 20 years with 3% escalation: ~700–800 USD/pole in undiscounted energy cost

Solar streetlights:

• Draw 0 kWh from the grid
• Energy OPEX is effectively zero, aside from minimal controller self-consumption

For a 1 km stretch with 30 poles, this can mean 20‑year energy savings of 20,000–25,000 USD at current tariffs.

4.2 Maintenance Costs

Grid-connected lighting typically incurs:

• LED driver and luminaire replacement every 8–12 years
• Annual inspections
• Corrective maintenance for cable faults, vandalism, or surge damage

Solar streetlighting maintenance profile:

• Battery replacement:
  • Lead-acid: every 3–5 years (high OPEX, not recommended for 20‑year TCO)
  • LiFePO4: 8–12 year life at 70–80% depth of discharge, 4,000–6,000 cycles
• PV module cleaning: 1–4 times/year, depending on soiling
• Electronics and LED: similar lifetimes to grid-connected LED

With LiFePO4 batteries, many projects see maintenance truck rolls cut by 50–70% vs. traditional grid-connected systems, especially in areas prone to cable faults and power surges.

5. Reliability, Performance, and Risk

5.1 Availability and Outages

• Grid-connected systems are vulnerable to:

  • Grid outages (20–100+ hours/year in many regions)
  • Cable theft and vandalism
  • Transformer overloads

• Solar streetlights, properly sized, can achieve:

  • 2–3 nights of autonomy (battery backup)
  • ≥99% availability if PV and battery are sized for worst-month irradiance

This reliability translates into lower risk of accidents, better security, and fewer complaints—factors that, while hard to monetize, influence TCO indirectly via liability and social costs.

5.2 Standards and Compliance

Both solutions must meet lighting and electrical safety standards:

• Photometric performance: IES, CIE, EN 13201
• Electrical safety: IEC/UL standards for luminaires, drivers, and batteries
• Interconnection (for grid-connected): IEEE 1547, local utility codes

Solar streetlights add:

• PV module design qualification: IEC 61215
• Safety and performance: IEC 61730, relevant UL standards

Compliance reduces failure risk and improves asset life, directly affecting TCO.

Applications and Use Cases: Where Each Option Makes Sense

1. Municipal Roadway Lighting

For secondary roads, peri-urban extensions, and rural corridors:

• Solar streetlights excel when:

  • Grid extension per km is costly (>50,000 USD/km)
  • Tariffs exceed 0.12–0.15 USD/kWh
  • Reliability is low (frequent outages)
  • Municipal budgets favor predictable OPEX and CAPEX grants

• Grid-connected may be preferred when:

  • Grid is already along the corridor with spare capacity
  • Tariffs are low (<0.08–0.10 USD/kWh)
  • Utility offers subsidized tariffs for public lighting

2. Industrial Parks and Private Developments

Private developers often prioritize speed, reliability, and lifecycle cost:

• Solar streetlighting benefits:

  • Rapid deployment: no utility coordination, no trenching delays
  • Clear 20‑year OPEX profile (near-zero energy cost)
  • Strong ESG story for investors and tenants

• TCO modeling often shows payback in 4–7 years vs. grid-connected alternatives, yielding 8–15% IRR depending on tariff and CAPEX assumptions.

3. Remote Sites and Off-Grid Communities

In remote mining, logistics, or community applications:

• Grid extension can exceed 100,000 USD/km
• Diesel generation costs 0.25–0.40 USD/kWh

Here, solar streetlighting is almost always TCO-optimal, often with lifecycle savings >60% and dramatically lower operational complexity.

Comparison and Selection Guide

1. High-Level TCO Comparison (Illustrative)

Assumptions (per pole): 50 W LED, 4,200 h/year, 0.14 USD/kWh, 3% tariff escalation, 20‑year horizon, discount rate 6%. Values are indicative and should be recalibrated for local conditions.

Parameter	Solar Streetlight (LiFePO4)	Grid-Connected LED
Initial hardware CAPEX/pole	900–1,200 USD	500–700 USD
Grid/trenching CAPEX/pole	0 USD	400–1,000 USD
20‑year energy cost/pole	~0 USD	700–800 USD
20‑year maintenance cost/pole	250–400 USD	350–600 USD
20‑year TCO/pole (indicative)	1,150–1,600 USD	1,550–2,500 USD
Typical payback vs. grid	4–7 years	N/A
Grid dependency	None	Full
CO₂ emissions (kg CO₂e/year/pole)	~0 (operational)	80–170 (depending on mix)

On a 1 km stretch with 30 poles, these differences scale to tens of thousands of dollars over 20 years.

2. Key Technical Selection Criteria

When deciding between solar and grid-connected lighting, evaluate:

• Energy Tariff and Escalation

  • If current tariff >0.12–0.15 USD/kWh and rising, solar becomes increasingly attractive.

• Grid Extension Costs

  • Calculate trenching, cabling, and transformer upgrades per km.

• Irradiance and Climate

  • Use local solar resource data (e.g., NREL, IEA) to size PV and battery for worst month.

• Lighting Requirements

  • Target lumen output and uniformity per EN 13201/IES; avoid oversizing both solutions.

• Battery Technology

  • Prefer LiFePO4 for 8–12 year life and better TCO; avoid undersized or low-quality batteries.

• Operational Model

  • Who maintains the system? Consider service contracts, SLAs, and remote monitoring.

3. Practical Steps to Build a Bankable TCO Model

1. Define the baseline: road class, pole spacing, lumen levels, design life.
2. Gather local data: tariffs, escalation, outage statistics, labor rates.
3. Get itemized CAPEX: separate luminaires, poles, grid works, and solar components.
4. Model energy use: kWh/pole/year × tariff × 20 years with escalation.
5. Model maintenance: replacement cycles, truck rolls, and labor/material costs.
6. Discount cash flows: compute NPV and IRR for each option over 20 years.
7. Stress test: run scenarios for +20% CAPEX, ±3% tariff changes, and different battery lives.

This structured approach allows municipal and private developers to justify procurement decisions with transparent, data-driven TCO comparisons.

FAQ

Q: What is total cost of ownership (TCO) in streetlighting projects? A: Total cost of ownership (TCO) is the sum of all costs incurred over the full life of a streetlighting asset, typically 15–25 years. It includes initial CAPEX (luminaires, poles, grid or solar infrastructure), ongoing OPEX (energy, maintenance, repairs), and end-of-life replacements such as batteries or drivers. For municipal and private developers, TCO is a better decision metric than upfront CAPEX because it captures the long-term impact of energy tariffs, reliability, and maintenance regimes on budgets and service levels.

Q: How does a solar streetlight work compared to a grid-connected light? A: A solar streetlight integrates a PV module, battery, LED luminaire, and controller on or near the pole. During the day, the PV module charges the battery; at night, the controller powers the LED from the battery according to a programmed schedule or sensor input. A grid-connected light, by contrast, draws power from the utility grid via underground or overhead cables and relies on the grid’s availability. Functionally, both provide illumination, but their energy sources, wiring, and failure modes are different, which directly affects TCO and reliability.

Q: What are the main cost advantages of solar streetlights over grid-connected lighting? A: The main cost advantages of solar streetlights are the elimination of grid energy costs and the avoidance of trenching and cabling CAPEX. Over 20 years, a typical 50 W LED grid-connected light can consume 700–800 USD worth of electricity at 0.14 USD/kWh, while a solar unit uses 0 kWh from the grid. On greenfield projects, avoiding 0.5–1.5 km of trenching and cabling per km of road can reduce project CAPEX by 20–30%. Additionally, with modern LiFePO4 batteries, maintenance intervals are longer, reducing truck rolls and labor costs.

Q: How much does a solar streetlighting system cost compared to a grid-connected system? A: Per pole, a quality solar streetlight with LiFePO4 battery typically costs 900–1,200 USD installed, while a grid-connected LED pole may cost 500–700 USD for the luminaire and pole alone. However, when you add trenching, cabling, and transformer upgrades, grid-connected CAPEX can rise by 400–1,000 USD per pole, especially on new roads. Over a 20‑year horizon, the higher upfront cost of solar is often offset by zero energy bills and lower maintenance, resulting in a lower TCO in many use cases.

Q: What technical specifications should I consider when selecting solar streetlights? A: Key specifications include LED power (typically 30–80 W), lumen output (3,000–8,000 lm), color temperature (3,000–5,700 K), and optical distribution to meet EN 13201 or IES requirements. For the solar subsystem, consider PV wattage (80–200 W), battery type (preferably LiFePO4), battery capacity (60–120 Ah at 12–24 V), and autonomy (2–3 nights at nominal load). Also evaluate controller features such as dimming profiles, motion sensing, and remote monitoring, as well as compliance with IEC 61215/61730 and relevant UL/IEC safety standards.

Q: How are solar streetlights installed and what is the typical deployment timeline? A: Solar streetlights are installed similarly to conventional poles: foundations are prepared, poles are erected, and luminaires are mounted. The key difference is the absence of trenching and cabling between poles and substations. Each unit is a self-contained system, so installation can proceed pole by pole with minimal coordination with the utility. For a 1–2 km project, installation and commissioning can often be completed in a few days to a couple of weeks, compared to several months when utility approvals, trenching, and grid interconnection are required for grid-connected lighting.

Q: What maintenance do solar streetlights require over their lifetime? A: Solar streetlights require periodic cleaning of PV modules (1–4 times per year depending on dust and pollution), visual inspections of wiring and fixtures, and occasional firmware or settings updates. The main scheduled replacement is the battery: LiFePO4 batteries typically last 8–12 years, so one replacement is expected in a 20‑year project. LED luminaires and drivers may also require replacement after 10–15 years. With proper design and quality components, maintenance frequency can be lower than for grid-connected systems, especially where cable faults and power surges are common.

Q: How do solar streetlights compare to grid-connected lights in terms of reliability and performance? A: When correctly sized for local irradiance and load, solar streetlights can achieve ≥99% availability due to their independence from grid outages and cable faults. They provide consistent lighting as long as the battery has sufficient capacity and the PV module is not heavily soiled. Grid-connected lights can offer excellent performance where the grid is stable, but in regions with frequent outages (20–100+ hours/year), their effective availability can be significantly lower. From a performance standpoint, both can meet modern lighting standards; the difference lies in resilience and autonomy.

Q: What ROI can municipal or private developers expect from solar streetlighting? A: ROI depends on local tariffs, CAPEX, and maintenance costs, but many projects achieve payback in 4–7 years compared to grid-connected alternatives. Over a 20‑year period, lifecycle savings of 30–60% are common in areas with high grid extension costs and tariffs above 0.12–0.15 USD/kWh. When modeled with a realistic discount rate (e.g., 6–10%), internal rates of return (IRR) in the 8–15% range are achievable, especially when factoring in avoided grid upgrades and improved reliability that reduces social and safety costs.

Q: What certifications and standards should solar streetlighting systems comply with? A: Key certifications include IEC 61215 for PV module design qualification and IEC 61730 or equivalent UL standards for PV module safety. LED luminaires should comply with relevant IEC/EN/UL luminaire and driver standards, and batteries should meet applicable safety and performance standards for LiFePO4 chemistry. While solar streetlights are typically not grid-interconnected, projects should still reference lighting design standards such as EN 13201 and CIE/IES guidance. For grid-connected alternatives, IEEE 1547 and local utility interconnection rules apply to any distributed generation components.

References

1. NREL (2024): Solar resource data and PVWatts calculator methodology for estimating PV energy production and system performance.
2. IEC 61215 (2021): Crystalline silicon terrestrial photovoltaic (PV) modules – Design qualification and type approval for long-term reliability.
3. IEEE 1547 (2018): Standard for interconnection and interoperability of distributed energy resources with associated electric power systems interfaces.
4. IEA PVPS (2024): Global photovoltaic power systems market analysis and trends, including cost trajectories and deployment statistics.
5. IRENA (2023): Renewable Power Generation Costs report, detailing LCOE trends for solar PV and related technologies.
6. CIE/IES (2020): International and Illuminating Engineering Society guidelines for roadway and outdoor lighting design and performance.
7. EN 13201 (2015): Road lighting standard specifying lighting classes, performance requirements, and energy considerations for public lighting.
8. UL (2022): Safety standards for LED luminaires, batteries, and control equipment used in outdoor lighting applications.

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About SOLARTODO

SOLARTODO is a global integrated solution provider specializing in solar power generation systems, energy-storage products, smart street-lighting and solar street-lighting, intelligent security & IoT linkage systems, power transmission towers, telecom communication towers, and smart-agriculture solutions for worldwide B2B customers.